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Infinera (INFN) Thomas J. Fallon on Q1 2016 Results - Earnings Call Transcript

Q1 2016 Earnings Call

April 27, 2016 5:00 pm ET

Executives

Jeff Hustis - Head-Investor Relations

Thomas J. Fallon - Chief Executive Officer & Director

Brad D. Feller - Chief Financial Officer

David F. Welch - Co-Founder, President & Director

Analysts

George C. Notter - Jefferies LLC

Alex Henderson - Needham & Co. LLC

Vijay K. Bhagavath - Deutsche Bank Securities, Inc.

Simon M. Leopold - Raymond James & Associates, Inc.

Sanjiv Wadhwani - Stifel, Nicolaus & Co., Inc.

Douglas Clark - Goldman Sachs & Co.

Stanley Kovler - Citigroup Global Markets, Inc. (Broker)

Rod B. Hall - JPMorgan Securities LLC

Jess Lubert - Wells Fargo Securities LLC

Tim Savageaux - Northland Capital Markets

Dmitry G. Netis - William Blair & Co. LLC

Meta A. Marshall - Morgan Stanley & Co. LLC

Operator

Hello and welcome to the First Quarter Year 2016 Investment Community Conference Call of Infinera Corporation. All lines will be in a listen-only mode until the question-and-answer session. Today's call is being recorded. If anyone has any objections, you may disconnect at this time.

I would now like to turn the conference over to Mr. Jeff Hustis of Infinera Investor Relations. Jeff, you may begin.

Jeff Hustis - Head-Investor Relations

Thank you, operator. Welcome to Infinera's first quarter of fiscal year 2016 conference call. A copy of today's earnings is available on the Investor Relations section of Infinera's website. Additionally, this call is being recorded and will be available for replay from the website.

Today's call will include projections and estimates that constitute forward-looking statements. These may include statements regarding Infinera's overall business strategy, market conditions, market and growth opportunities, Infinera's results of operations, views on Infinera's customers and its products, integration of Transmode as well as Infinera's financial outlook for the second quarter of fiscal 2016. These statements are subject to risks and uncertainties that could cause Infinera's results to differ materially from management's current expectations.

Please refer to Infinera's current press releases and SEC filings, including Infinera's most recently filed quarterly report on Form 10-Q and subsequent filings for more information on these risks and uncertainties. Please be reminded that all statements are made as of today and Infinera undertakes no obligation to update or revise any forward-looking statements to reflect events or circumstances that may arise after the date of this call.

Today's earnings release and conference call include certain non-GAAP financial measures. Pursuant to Regulation G, Infinera has provided a reconciliation of these non-GAAP financial measures to the most directly comparable GAAP financial measures in its first quarter earnings release, which has been furnished to the SEC on Form 8-K and is available on Infinera's website in the Investor Relations section.

I would now like to turn the call over to Chief Executive Officer, Tom Fallon.

Thomas J. Fallon - Chief Executive Officer & Director

Good afternoon and thank you for joining us on our first quarter 2016 conference call. Joining me today are Chief Financial Officer Brad Feller, and President Dave Welch. Today I'll go over financial highlights for Q1 and provide an update on our business and (02:27) the market and how our recently announced technology advancements will help us continue to win market share. I will then turn the call over Brad, who'll provide a more detailed review of our first quarter results and our outlook for the second quarter of 2016.

We executed well in Q1 with revenues of $245 million, non-GAAP gross margins of 50%, and non-GAAP earnings of $0.19 per diluted share. We continue to outgrow our market while generating industry-leading margins. While we are not yet able to generate 50% margins consistently, our Q1 result is a powerful demonstration of the value we deliver to our customers and the unique leverage we derive from our vertically integrated operating model.